When does keyword advertising infringe trade mark rights?
Updated: Aug 31
A small accounting company (Global Infosys Ltd) was recently found to have infringed a rival's registered trade mark as a result of a Google Ads campaign that ran for two months in spring 2021.
The action was brought by E-Accounting Solutions Ltd, which trades as Advance Track and offers outsourcing services to accountants. It registered a trade mark for Advance Track in 2010.
The defendant’s marketing consultant included the term ‘advancetrack’ as a keyword in a Google AdWords campaign, and the term was also included in the internet adverts – though the defendant claimed, and the judge accepted, that this was due to an error or misunderstanding.
Visible and invisible use
The case came before the Birmingham Business and Property Court. The judge, His Honour Judge Tindal, found that “on the balance of probabilities the Claimant and its trade mark ‘Advance Track' has for several years had an established reputation in respect of outsourcing and offshoring for British accountants”. He also rejected a counterclaim to invalidate the mark, saying it had not become customary or descriptive.
Turning to infringement, the judge distinguished between visible use (eg, in an advert text) and invisible use (as a keyword) on the internet, noting that the law and test for each is different.
Regarding the use as a keyword, he found that the keyword sign AdvanceTrack and the trade mark Advance Track were “identical”, despite the presence of a space in the latter, and that even if they were not identical they were confusingly similar. Applying the test set out by the CJEU in Google France, he also took into account how the ad was presented.
In this case, said HHJ Tindal, the position “is not borderline”. He reached this conclusion because the prominence of the word Advancetrack in the advert:
“would plainly not have enabled the average accountant (or only with difficulty) to ascertain whether services advertised originated from the Claimant (or a connected business) as opposed to a third party”.
This conclusion was supported by an example of actual confusion experienced by one of the Claimant's clients.
Regarding the advert text itself, he found that the text ‘Advancetrack’ was identical to and/or confusingly similar to and/or detrimental to the reputation of the Claimant's mark and there was therefore infringement under s 10(1), s 10(2) and s 10(3) of the Trade Marks Act 1994. In relation to the text 'Advancetrack Outsourcing', there was infringement of s 10(2) and s10(3) only.
Although the Claimant was successful in proving infringement, the judge warned that it gained no advantage from the adverts and that damages to the claimant should be assessed on a summary basis – if settlement is not possible.
Impact of Brexit
The judge reviewed in detail the impact of the EU Withdrawal Agreement and the likely effect of the Retained EU Law (Revocation and Reform) Act 2023, which gained Royal Assent on 30 June 2023.
He stated that “Brexit’s implementation has made no difference to the legal position in this case” as the principle of EU Law Supremacy (including indirect effect) still applies.
However, he added that the enactment of the 2023 Act means “fundamental change is now on the horizon next year” and this could affect the legal implications of keyword use from 2024. He therefore considered whether his findings would be different based on domestic statutory interpretation, and concluded that they would not.
What does this mean?
There are several important takeaways from this case. As the judge said, keyword advertising is a “legal minefield”:
“This case may be helpful as an example of how not to do it. A wise first move will be a search whether a competitor's brand is actually a trade mark. If so, including it in the advert itself as opposed to as just a 'keyword' can backfire commercially as well as legally (save in the context of legitimate comparative advertising).
However, even limiting it to a keyword may not be enough to avoid liability – a small business would be well-advised to ensure their advert makes positively clear their lack of any connection to the mark proprietor.
It may be wise for a small business to get advice, especially in these legally as well as commercially uncertain times, as our legal system begins in earnest to detach from the EU.”
An average accountant
Confusion was found here even though, the question was how the advert generated by the keyword would have appeared to the “average accountant” – typically a more sophisticated consumer than average.
An expensive marketing consultant
Another, final, point is that the Defendant authorised the acts of its consultant, including the erroneous inclusion of the infringing text, as the ads were places following its instruction and on its behalf, and the Defendant did not check the ads, even when it became aware there was a problem. All businesses that employ outside consultants for marketing, advertising etc should ensure that they offer clear training and guidance to such consultants regarding the use of keyword advertising, as well as related issues such as the use of third party images etc.